About the 2017 Awards Selection Process

Ensure the Awards criteria are understood by the target audience (members of the public who may use the Awards in the selection of managed funds) and,

Ensure a high level of transparency of the Awards judging process to maximise objectivity, clarity and understanding of the Awards process.

Fund Manager of the Year Sector Awards

All fund managers with funds registered in New Zealand, available to retail investors and captured in the FE Analytics New Zealand database are considered for Sector Award nominations and Awards.

A range of quantitative and qualitative screens are applied to each sector to generate a nominee list. Quantitative screens based on information as at 30 June 2017 are then used to select the eventual Sector Award winners, from the nominee list.

The fund sectors are:

Diversified

New Zealand Equity

Australasian Equity

Australian Equity

International Equity

Australasian Property

International Property

New Zealand Fixed Interest

International Fixed Interest

Alternatives

a) Nominee selection process

Quantitative Screening:

New Zealand representation and open for new investment

Preferred 3 years of performance history

Neutral to positive fund flow for the year

General availability to the public, (i.e. not a private fund)

Peer group relative fee structure

Three or more FundSource star ratings as at 30 June 2017

Funds captured and reported in the FE Analytics New Zealand database

Qualitative Screening:

Successful nominees must then pass a range of qualitative criteria, in line with the FundSource qualitative research criteria covering:

Corporate & Investment Governance

Investment Philosophy & Process

People

Portfolio Construction & Implementation

Risk Management

Investment Fees

Where two or more funds qualify for nomination, which are mirror funds (in investment terms), the most flexible and transparent fund receives the nomination.

b) Sector Award winner selection

The nominees that successfully pass the above screening process are then analysed on a performance based approach. The manager with the highest average quantitative and qualitative fund rating will be the Sector Award winner.

Fund of the Year Longevity Award

Introduced in 2016 the Longevity Award recognises the fund manager who has been able to deliver high and consistent performance over the medium to long term.

All retail funds available to New Zealand investors and captured in the Financial Express Analytics database will be measured and plotted on a three and five year risk adjusted performance basis along with screens embedded in FundSource’s normal fund research process.

Nominee selection process

Quantitative Screening:

New Zealand representation and open for new investment.

Minimum five years of performance history.

General availability to the public, (i.e. not a private fund).

Peer group relative fee structure

Outperform relevant sector average

Qualitative Screens

Successful nominees must then pass a range of qualitative criteria, in line with the FundSource qualitative research criteria covering:

Corporate & Investment Governance

Investment Philosophy & Process

People

Portfolio Construction & Implementation

Risk Management

Investment Fees

KiwiSaver Manager of the Year

All funds management companies with mainstream KiwiSaver funds promoted to members and represented in the FE Analytics database are considered for KiwiSaver manager of the year nominations and awards.

Quantitative and qualitative screens based on information as at 30 June 2017 are used to generate a nominee list and applied to each fund manager to select the eventual KiwiSaver Manager of the Year Award winner.

a) Nominee selection process

Quantitative Screening:

Open for new investment

Preferred history of three years organisational performance

Growth in Assets Under Management 1 July – 30 June 2017

Mainstream fund services available in flexible, cost competitive retail form, in the following fund sectors: conservative, balanced and growth

No potentially high up-front costs

General availability to the public

Minimum three or more FundSource star ratings as at 30 June 2017

Funds captured and reported in the FE Analytics New Zealand database

Outperform sector average

Qualitative Screening:

Successful nominees must then pass a range of qualitative criteria, in line with the FundSource qualitative research criteria covering:

Corporate & Investment Governance

Investment Philosophy & Process

People

Portfolio Construction & Implementation

Risk Management

Investment Fees

The nominee list is then constructed containing all fund managers who have passed the range of criteria set out in the nominee selection process.

b) KiwiSaver Manager of the Year Selection

Selection of the KiwiSaver Manager of the Year is derived from a performance based process that aims to fairly represent the achievement of each fund manager on behalf of its members.

The performance calculation stages are:

A representative fund is chosen for each fund manager across each of the three mainstream diversified fund categories. The fund chosen, in each fund category for each manager, will be the most representative, flexible and transparent fund offered by that fund manager and comparable across managers.

Each fund’s quantitative fund rating for the three year period to 30 June 2017 are collated.

Where a manager does not have a minimum three year history for a fund in any category, they will receive a zero performance score for that category.

The following weights are applied to each of these average performance calculations:

Conservative 33.3%

Balanced 33.3%

Growth 33.3%

Boutique Manager of the Year

The following is a summary of FundSource’s investment research process that is used to select nominees and the eventual winners of the Boutique Fund Manager of the Year Awards.

Boutique, New Zealand based retail fund managers and their funds are considered for Award nomination.

A range of qualitative and quantitative screens based on information as at 30 June 2017 are applied to each fund manager to generate a nominee list.

a) Nominee selection process

Quantitative Screening:

Funds management capability in New Zealand and available to retail investors

New Zealand representation and open for new investment

Employee ownership

Preferred three years of performance history

Growth in Assets Under Management 1 July 2016 – 30 June 2017

No potentially high up-front costs, restrictions or fees

General availability to the public (i.e. not a private fund)

Three or more FundSource star ratings as at 30 June 2017

Funds captured and reported in the FE Analytics database

Outperform relevant sector average and the FundSource sector benchmark over the one year period

Qualitative Screening:

Successful nominees must then pass a range of qualitative criteria, in line with the FundSource qualitative research criteria covering:

Corporate & Investment Governance

Investment Philosophy & Process

People

Portfolio Construction & Implementation

Risk Management

Investment Fees

b) Boutique Fund Manager of the Year Selection

The nominees that successfully pass the above screening process are then analysed on a performance based approach. The manager with the highest average quantitative and qualitative fund rating will be the Boutique Award winner.

All of the above screens are embedded within FundSource’s normal fund research process, several of these forming key hurdles required to be achieved to attain FundSource’s recommended or better qualitative fund rating.

Fund Manager of the Year

All funds management companies that have retail investment funds available for sale to New Zealand investors, have New Zealand representation and are captured in the Financial Express Analytics New Zealand database will be considered for the Fund Manager of the Year nominations and Awards.

Based on information at 30 June 2017 a range of quantitative and qualitative screens are applied to each fund manager to generate a nominee list.

a) Nominee selection process

Quantitative screening

Selection of the Fund Manager of the Year is derived from a performance-based process that aims to fairly represent the achievement of each fund manager on behalf of its clients. The fund manager must satisfy the following:

Funds management capability available to New Zealand retail investors

New Zealand based representation

Open for new investment

Preferred history of three years organisational performance

Growth in Assets Under Management 1 July 2016 - 30 June 2017

Mainstream fund services available in cost competitive retail form

No potentially high up-front costs

Peer group relative fee structure

General availability to the public, (i.e. not a private fund)

Minimum initial investment is in line with industry standard

Minimum three or more FundSource star ratings as at 30 June 2017 across representative mainstream funds

Funds captured and reported in the FE Analytics New Zealand database

Outperform relevant sector average and the FundSource sector benchmark over the one year period

Qualitative screening

Successful nominees must pass a range of qualitative criteria, in line with the FundSource qualitative research criteria covering:

Corporate & Investment Governance

Investment Philosophy & Process

People

Portfolio Construction & Implementation

Risk Management

Investment Fees

b) Nominee list

The nominee list is then constructed containing all fund managers who have passed the range of quantitative and qualitative criteria set out in the nominee selection process. Selection of the Fund Manager of the Year is derived from a performance-based process that aims to fairly represent the achievement of each fund manager on behalf of its clients. The performance calculation stages are:

Representative funds are chosen for each fund manager across mainstream fund categories. The fund chosen, in a fund category for each manager, will be the most representative, flexible and transparent fund offered by that fund manager and comparable across managers.

Each fund’s quantitative and qualitative fund rating is collated by the judges and a winner selected.